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CIRCULAR No

CIRCULAR No. 93/1997/TT-BTC OF DECEMBER 29, 1997 GUIDING THE IMPLEMENTATION OF THE TAX POLICY APPLICABLE TO SHOPS SELLING DUTY-FREE GOODS TO THE CHINESE WHO ARE ON EXIT WITH LAISSEZ-PASSERS AT THE BORDER GATES OF THE NORTHERN BORDER PROVINCES

Following Prime Minister Phan Van Khai's direction in Official Dispatches No. 3255/KTTH of June 30, 1997 and No. 4295/KTTH of August 28, 1997 of the Office of the Government regarding the permission on the sale of duty-free goods to the Chinese who are on exit with laissez-passers at Lao Cai and Quang Ninh provinces,

Proceeding from Circulars No. 72A-TC/TCT of August 30, 1993, No. 107-TC/TCT of December 30, 1993 and Point 7 of Circular No. 84-1997/TT/BTC of November 13, 1997 of the Ministry of Finance guiding the implementation of the tax policy applicable to duty-free shops at international seaports and airports in Vietnam.

After consulting the General Department of Customs and the Ministry of Trade,

The Ministry of Finance hereby provides the following guidance on the implementation of the tax policy applicable to the sale of duty-free goods to the Chinese on exit with laissez-passers at the northern border gates:

I. Subjects and scope of regulation: The duty-free shops which are granted by the Ministry of Trade permits to sell duty-free goods to passengers on exit at the border gates of the northern border provinces, shall be allowed to sell goods to Chinese passengers on exit (including Chinese officers and crew members) with border laissez-passers (group and individual) granted by a competent agency. The goods which duty-free shops are allowed to deal in shall be permitted by the Government and the Ministry of Trade to be sold to the above-mentioned subjects.

The above-mentioned subjects shall be allowed to buy duty-free goods with the value equivalent to the amount of foreign currency(ies) brought into Vietnam as declared in the Entry Baggage Declaration Form HQ-60.

II. Taxes applicable:

1. Import tax, special consumption tax: Goods imported from abroad into Vietnam and goods made in Vietnam which are on sale at duty-free shops shall be entitled to import tax and special consumption tax (if any) exemption. When importing goods into Vietnam, enterprises owning duty-free shops shall have to send a dossier applying for temporary exemption from import tax and special consumption tax (if any) to the Ministry of Finance. The procedures and tax payment and settlement shall comply with the concrete provisions in Point 7 of Circular No. 84/1997/TT/BTC of November 13, 1997 of the Ministry of Finance guiding the amendments and supplements to a number of points in Circulars No. 72A-TC/TCT of August 30, 1993, No. 107-TC/TCT of December 30, 1993 and No. 53-TC/TCT of July 13, 1995 of the Ministry of Finance regarding import and export taxes.

2. Turnover, profit and other taxes, fees and the declaration procedures shall comply with the regime stipulated in Circular No. 107-TC/TCT of December 30, 1993 of the Ministry of Finance guiding the implementation of the tax policy applicable to duty-free shops at the seaports and international airports of Vietnam and other regulations currently in force.

III. Sale invoices and affixture of stamps on duty-free goods:

Invoices issued by the Ministry of Finance must be used or invoices of a particular type may be used if it is so approved by the Ministry of Finance (the General Department of Taxation). Such an invoice must clearly indicate the customer's name, the number of his/her laissez-passer, the date of exit, the quantity and value of goods sold and bear all elements necessary for the management of vouchers and invoices in accordance with the Finance Ministry's regulations on the management and use of sale invoices

Goods which are sold at duty-free shops must be affixed with stamps "VIETNAM DUTY NOT PAID" and comply with the provisions in Circular No. 55-TC/TCT of September 16, 1996 of the Ministry of Finance guiding the implementation of Decision No. 195-TTg of April 8, 1996 of the Prime Minister issuing the regulations on duty-free shops.

IV. Currency used in the payment for goods purchased at duty-free shops: Goods at duty-free shops shall be sold and purchased in a currency freely converted according to international practices and at a rate announced by the State Bank of Vietnam.

V. Organization of implementation and provisions on implementation:

The people eligible for duty-free goods, goods items, quotas of the duty-free goods sold, sale procedures, procedures for customs control and inspection and the regime of reporting on the handling of violations committed by business enterprises selling duty-free goods to Chinese people on exit with laissez-passers at the northern border provinces shall strictly comply with the provisions of this Circular and relevant regulations of the General Department of Customs and the Ministry of Trade.

This Circular takes effect from the date of its signing. In the course of implementation, any problem should be referred to the Ministry of Trade, the General Department of Customs and the Ministry of Finance (the General Department of Taxation) for timely consideration and resolution.

For the Minister of Finance

Vice Minister

VU MONG GIAO